CORPORATE GOVERNANCE 2017

Transcription

1 CORPORATE GOVERNANCE 2017

2 Table of Contents Corporate Governance Code of Listed Companies and Legal Entities... 1 Corporate Governance Application Scope and Compliance with its Principles... 1 Board... 2 Business Organization Structure... 2 Bank s Board of Directors... 3 The Executive Management... 4 The Executive Management of the Bank s Group... 5 Executive Committee... 7 Audit and Risk Committee... 8 Policies and Procedures Committee... 8 Governance Committee... 8 Nominations, Compensation and Benefits Committee... 8 Zakat Committee... 8 Internal Audit... 9 Compliance Division Shariah Supervisory Board Bank s Social Responsibility Environmental Policies Health Policies Note: This is a translation of QIB Corporate Governance Report. In case of any discrepancies, the Arabic version shall prevail.

3 Corporate Governance Code of Listed Companies and Legal Entities Governance is considered one of the most important corporate governance systems due to the principles that it establishes from good management; identification of the tasks and responsibilities of the Board of Directors, the Senior Executive Management and the Bank staff; justice and equality among stakeholders, productive control and risk management; transparency and disclosure; organization of stakeholders rights; and community development and promotion; which led to the improvement of the Bank s performance in general; thus inevitably ending with the achievement of the true meaning of the principle of upholding the public interest, and the interest of the Bank and its stakeholders and putting it before any other interest. Establishment of the following principles: Principle of Transparency: This principle is based on good faith, and it relies on honesty and openness and upholds the values of self-censorship and integrity; in addition to exercising extreme caution, diligence, and honesty in performing the tasks and functions assigned to each Bank official and employee; and it is implemented by the Chairman and members of the Board of Directors and the Senior Executive Management up until all the employees and other relevant parties in the Bank. This principle works on avoiding and reducing conflicts of interest and achieving the public interest under the concept of fair investment in the market. Principle of Taking Responsibility and its Acknowledgement: It aims to determine the rights, duties and responsibilities in the Bank; develop an appropriate control mechanism to hold each official responsible for his work and assess his performance; and evaluate the Bank s performance in general, according to the best international standards. It also aims to make the official acknowledge his responsibility; in addition to outlining the Bank s social responsibility and its role towards the society; and working on its development and prosperity and the preservation of the environment. Principle of Justice and Equality: Stakeholders, preceded by the shareholders, have equal rights, and it is prohibited discriminate between them on the basis of race, sex, and religion, and they all have the same rights arising from their ownership of shares or their capacity at the Bank. Corporate Governance Application Scope and Compliance with its Principles Article (2) Application Scope The principles and provisions of this code applies to the companies and legal entities listed on the Qatar Stock Exchange. In the Annual Report, the Bank disclosed the extent of its compliance and implementation of the principles and provisions of this System. Article (3) Compliance with the Corporate Governance Principles The Board of Directors will review and update the governance applications consistently and regularly, and comply with the application of the best corporate governance principles. Article (4) Corporate Governance Report The Corporate Governance Report includes the Bank s disclosure of its compliance with the application of the provisions of this System, and all the information concerning the application of its principles and provisions, including: 1- The procedures followed by the Bank on the application of the provisions of this System. 2- As of 31/12/2017 Qatar Central Bank (QCB) imposed fines totaling QR 884,400 (Eight hundred eighty-four thousand four hundred Qatari riyals only) due to some violations concerning the regulations and instructions of QCB. 3- Disclosure of the information regarding the members of the Board and its committees, and the Senior Executive Management at the Bank. 4- Disclosure of the risk management procedures, and the internal control. 5- The committees work and the number of meetings. 6- Risk identification. 7- Evaluation of the Board s performance. 8- Disclosure of the deficiencies in the application of the Internal Control System. 9- Disclosure of the extent of the Bank s compliance with the rules and conditions of the disclosure and listing on the market. 10- Number of disputes & litigations in which the bank was a party 565 case. 11- Disclosure of the transactions and deals concluded by the Bank with a Relevant Party. 12- There were 3,424 grievances, complaints, proposals and notifications and they were handled by the Quality Control Department in coordination with the Bank s Executive Management. 1

4 Board Article (5) Requirements of the Board member The must be qualified and possesses sufficient knowledge in the administrative matters and has the appropriate expertise to perform his tasks effectively, and the must meet the following conditions: 1- He must not be less than the age of twenty-one years old, and has his full capacity. 2- He must not have been previously convicted of a criminal penalty or a crime prejudicial of honor or integrity 3- He must be a shareholder, holding the number of Bank s shares determined by Article of Association when elected, or within thirty days from the date of his election. Article (6) The Board Composition According to the Bank s Article of Association & relevant law the Board is established; provided that at least one-third of the Board members shall be independent members, and the majority are non-executives; one or more Board seats may be allocated for minority representation, and another for representing the Bank employees. Business Organization Structure QIB BOARD OF DIRECTORS (Chairman) Corporate Governance Committee Policies & Proceduers Committee Nomination & Remuneration Committee Executive Committee Zakat Committee Audit and Risk Committee QIB Shariah Board GM - QIB Lebanon' CEO - QIB UK' CEO - AFB' (Malaysia) CM - QIB Sudan' QIB GROUP CEO Compliance Internal Audit Shariah Audit GM-Personal & private Banking GM-Wholesale Banking & Treasury Chief Operating Officer Chief Finance Officer Branches Corborate Banking I Operations ALM & Funding Private Banking Corborate Accounting & Banking II IT Financial Control Atfluent Corborate Reporting & Internal Control Banking III Budgeting products Transaction Banking Investors & Rating & Marketing Business Services Agencies Relations Alternate Channels Financial Institution Premises & Projects Branch Procedures & Control Treasury Strategic Investment Chief Human Capital Officer Learning & Development HR Operations Recrutment Government Affairs OD & Performance Management Chief Risk Officer Market Risk Credit Risk Operatonal Risk Special Assets Legal Chief Strategy, Comm., QA Officer Strategy & Business Intellgence Marketing & Research Communication,PR,& Quality Assurance 2

5 Bank s Board of Directors As on the 31rd of December 2017, the Bank s Board of Directors consists of the following members: Name Membership Capacity Sheikh Jassim bin Hamad bin Jassim bin Jaber Al-Thani Represents the Al-Mirqab Capital Company. Mr. Abdullatif bin Abdullah Al Mahmoud Represents Dar Al-Sharq Group Mr. Mohamed Bin Issa Al Mohanadi Mr. Abdul Rahman Abdullah Abdul Ghani Al-Abdul Ghani Mr. Mansour Mohamed Abdel Fattah Al Muslah Mr. Abdullah bin Saeed Aleidah Represents the Al-Zubarah Trading Company Mr. Nasser Rashid S. Al-Kaabi Represents the Al-Sraiya Holding Company Sheikh Ali bin Ghanem bin Ali Al Thani Represents the Ali Bin Ghanem Al-Thani Group Sheikh Abdullah bin Khalied Bin Thani Al Thani Represents the Al Nayra Investment Company Board Chairman Board Vice- Chairman Executive / Non- Independent Number of Shares 10,867, % 325, % 250, % 250, % 385, % 1,366, % 250, % 250, % 250, % A Percentage of the Bank s Capital Sheikh Jassim bin Hamad bin Jassim bin Jaber Al-Thani Board Chairman He has been a member in the Bank s Board of Directors since 22/6/2004, and became the Board Chairman since April 2005 and Chairman of the Executive Committee. He graduated from the Royal Military Academy Sandhurst (RMAS) in the UK, and received a range of advanced training levels in leadership. He chairs the QInvest Board, which is the first Islamic investment bank in Qatar, and he is the Board Chairman of the Damaan Islamic Insurance Company; furthermore, he is a member in the boards of several financial and investment institutions and companies, such as the Qatar Navigation Company and the Qatar Insurance Company. Mr. Abdullatif bin Abdullah Al Mahmoud Board Vice-Chairman He has been a member of the Bank s Board of Directors since April 1996, and a member in several committees belonging to the Board. He received a Bachelor s degree in Economics and Business Administration from Seattle Pacific University (SPU) in the United States in 1982; afterwards, he rose up in several leadership positions in Qatar Petroleum since graduating until 2002, and he became a in the Al Jazeera Finance Company and a Chief Executive Officer for it until 2008, and he also chaired the Audit Committee in the Bank from 2001 till He participated in many conferences and scientific meetings in the energy production field; in addition to topics related to Islamic banking, and he is currently the Chief Executive Officer of Dar Al Sharq Printing, Publishing and Distribution, and was the Editor-in-Chief of the Al-Sharq Newspaper during the period from 2003 till

6 Mr. Mohamed Bin Issa Al Mohanadi He has been a member in the Bank s Board since 1996; in addition to being a Chairman of the Audit and Risk Committee, and a member of the Nominations, Benefits and Compensation Committee and the Governance Committee at the Bank. He received a Bachelor s degree in Business Administration from the Cairo University in 1977, and obtained the Master s degree in Management from the Seattle University in the United States in He held several management positions at the Emiri Diwan in Qatar, and became Minister for Cabinet Affairs from 2002 to 2005, where he worked full-time on his private business. In addition to his responsibilities at the Bank, he currently serves as a Board member at the Ooredoo Company. Mr. Abdul Rahman Abdullah Abdul Ghani Al-Abdul Ghani He has been a member in the Bank s Board since April 1996 and a member of the Executive Committee, the Policy Committee and the Zakat Committee at the Bank. He received a Bachelor degree with honors from the Boston University in the United States, and he served as a Board member of several national companies, including the Qatar Industrial Manufacturing Company (QIMC) and the United Development Bank. Mr. Abdul Ghani has high expertise and efficiency in Business Management and Diversified Investments field, and he chairs the Board of Directors of the Abdullah Abdul Ghani & Sons Trading & Contracting Group. Mr. Mansour Mohamed Abdel Fattah Al Muslah He has been a member in the Bank s Board since April 1996 and a member in several committees, including the Executive Committee and the Zakat Committee at the Bank. He holds a Bachelor s degree in Sociology from the Qatar University, and he held several positions in the Ministries of Interior and Defense, and now he moved to the General Secretariat of the Presidency of the Council of Ministers. He has many investment activities and business in the real estate field, and has previously served as a Board Chairman of the Aqar Company, and a member of several boards of directors, and he currently serves as a of the Al Jazeera Finance Company. Mr. Abdullah bin Saeed Aleidah He has been a member in the Bank s Board since April 2005, a Chairman of the Governance Committee, and a member of the Audit Committee and the Benefits and Compensation Committee. He has long experience in Administration and Management, and received a lengthy training and multiple programs in the Administration field specialized centers in Britain. He is currently serving as Director General of the Boruq Company for Investment, and he has multiple experiences and practices in the investment and real estate activity. In addition to these activities, he is the Board Chairman of the Al-Sailiya Club. Mr. Nasser Rashed S. Al-Kaabi He has been a member at the Bank s Board since March 2008, and a member of several committees, including the Executive Committee, and he chairs the Nominations, Benefits and Compensation Committee. He has extensive expertise and is highly experienced in the Business and Companies Establishment field since the beginning of the seventies of the last century; and he is the founder and owner of the Al-Sraiya Holding Company, which includes several companies in different specializations. He has been a member of the Consultative Assembly since 1995, and a member of the Advisory Board of the Supreme Council of the Gulf Cooperation Council; furthermore, he had previously served as a member of several Boards of Directors (including the Aqar Company) and specialized committees related to his activity in the Business and Real Estate Development field. Sheikh Ali bin Ghanem bin Ali Al Thani He holds a MBA from the University of Cambridge, and he serves as a Board Chairman of the Ali Bin Ghanem Al-Thani Group; a Board Vice-Chairman of the Ghanem Holding Company; a Board Member of three joint-stock companies: Al-Salam Holding Company, Doha Insurance Company, in addition to the Bank, which he joined in February 2014; a Board Vice-Chairman of the Gulf Investments Group; a former member of the United Development Company; and a supportive member of Center for Arab Unity Studies. He has published articles in Al-Raya newspaper and several versions. Sheikh Abdullah bin Khalied Bin Thani Al-Thani A member of the board of directors since February 2017, he represents Al Nayra for Investment company, and has a degree in Business Management. He is also a member of the board of directors at Ezdan Holding and Medicare Group. The Executive Management consists of the following: A group of individuals with operational responsibility at the Bank, appointed by the Board of Directors. The Executive Management is responsible for the management of the daily bank operations and activities, and it consists of the Chief Executive Officer as well as an experienced group from the Executive Management. The Executive Management reports directly to the Chief Executive Officer and the Senior Executives at the Bank. 4

7 The Executive Management of the Bank s Group is as follows: Bank s Executive Management Group Mr. Bassel Gamal Mr. Tarek Youssef Fawzi Mr. Rakesh Sanghvi Mr. Gourang Hemani Mr. Constantinos Constantinides Mr. Khalefa Al Mesalam Mr. Dorai Anand Mr. Atif Abdul Khaliq Mr. Samir El-Ghandour Position Group Chief Executive Officer General Manager - Wholesale Banking Group Chief Risk Officer Chief Finance Officer Chief Strategy Officer Head of Human Capital Group General Manager - Personal Banking Group Internal Audit Manager Head of Compliance Division Mr. Bassel Gamal Group Chief Executive Officer Mr. Bassel Gamal, holds the position of QIB s Group CEO since February 2013; having amassed over 25 years of experience in the banking and finance industry. He s currently the Chairman of QIB-UK and a of Qinvest. His career started with Commercial International Bank (Chase National Bank) in Egypt, in 1990 for more than a decade.in 2001, he joined Ahli United Bank Group in Bahrain during which he held many positions, last of which was Senior Deputy Group CEO - Banking Group. He was Ahli Bank s Deputy CEO in Qatar from 2004 until 2006, at which point he moved on to become the CEO until early Mr. Tarek Youssef Fawzi General Manager - Wholesale Banking Group Senior banking executive with over 32 years of international experience predominantly in Corporate Banking, Investment and Treasury domains with reputable international & regional banks. He holds Bachelor of Economics and Business Administration from The American University in Cairo. Tarek started his banking career with Arab African International Bank in Egypt and progress his career with leading banks such as Chase International Bank, Misr America International Bank, Burgan Bank Kuwait, National Bank of Oman in Sultanate Oman, Masherq Bank UAE. His last position prior to joining QIB was CEO and Country Head of Mashreq Bank Egypt. Mr. Rakesh Sanghvi Chief Risk Officer Rakesh is a Chartered Accountant (FCA) from the Institute of Chartered Accountants of India and a CISA qualification holder from the USA. He carries 29 years of rich experience in Risk, Corporate Banking and Corporate Finance with the Big 4 accounting firms and banks in the region. He worked with Ernst & Young in Bahrain for its audit and consulting practice. Before joining QIB in 2013 he was the Group Head of Risk Management at Ahli United Bank in Bahrain. He led the Corporate Finance unit of the bank and spent over 10 years in Corporate Banking in Bahrain; and with Ahli Bank in Qatar dealing with a wide variety of industry sectors and clients. Mr. Gourang Hemani Chief Finance Officer He carries 22 years of accounting and Finance experience with international banks and with leading audit firms. Gourang started his carrier with Price Waterhouse Coopers - India and progressed through Standard Chartered Bank - India followed by long standing career with Banque Saudi Fransi in Saudi Arabia for 15 years handling various roles including Asset Liability Management, Treasury Middle Office, Financial Planning. His last assignment, prior to joining QIB was with Banque Saudi Fransi as Deputy Chief Financial Officer. He is a CFA Charter holder, FRM, Chartered Accountant from India. Mr. Constantinos Constantinides Chief Strategy Officer Constantinos Constantinides (Dinos) joined QIB as Chief Strategy Officer to lead the Bank s transformation program. Prior to that Dinos held various senior roles at Al Rajhi Bank for the last eight years. Since 2007, he has been the General Manager of Strategy for Al Rajhi Bank responsible for business development and regional expansion. Previously he was Deputy General Manager in Retail Banking. As a management consultant with Accenture for seven years, he has led several strategic initiatives for European banks and financial institutions. Holds an MBA in International Strategy from University of Birmingham. 5

8 Mr. Khalefa Al Mesalam Head of Human Capital Group He has nearly 17 years of experience in the Banking Services; as he worked in several departments such as the Retail Banking Services and the Human Resources Management in major international and regional banking institutions. He began his career in the banking field with HSBC Qatar in the retail banking sector before assuming a number of different roles in the Customer Service Department, and the Branch Network and Service Quality in the Human Resources. Afterwards, he moved to the retail banking services sector at the Commercial Bank, and the last position he held before joining the Bank was the Recruitment Director for the group in the Gulf Bank. He joined the Bank in 2011 as the Head of the Recruitment and the Manpower Planning Sector within the Human Resources Group, and he moved through it to his current position. Mr. Dorai Anand General Manager - Personal Banking Group He has over 20 years experience in banking industry, particularly in retail banking, consumer assets business, customer service & operations. Mr. Anand has held various senior Management roles during his tenure with both world s leading conventional and Islamic banks. Most of his career have been with Citi Bank however for the last 8 years he has been associated with Al Rajhi Bank - Saudi Arabia. Prior to joining QIB Anand was General Manager - Retail Banking Group with Al Rajhi Bank. Article (7) Prohibition of Combining Positions The Bank s Board applies the rules prohibiting the combination of positions, without prejudice to the provisions of the law in this regard. It is not permissible for anyone in person or in his capacity to become a Chairman for the Board or a Vice-Chairman in more than two companies, whose head offices are located in the State; furthermore, he cannot become a in more than three companies, whose head offices are located in the State, and he cannot become a Managing Director for the Department in more than one company, whose head office is located in the State. It is prohibited to combine the membership of boards of two companies having homogeneous activity, or combine between the chairmanship of the Board and any executive position at the Bank. Article (8) Board s Key Functions and Tasks The Board prepared a charter called the Board Charter, where it outlines the Board s tasks, the rights and duties of the Chairman and the Board members and their responsibilities, in accordance with the provisions of the Law and the Code, and it is published on the Bank s website. Article (9) Board Responsibilities The Board represents all the shareholders, and it must exercise due diligence in the Bank s management in an effective and productive manner to achieve the interests of the Bank, partners, shareholders, and stakeholders, and achieve the public benefit, the investment development in the country, and the community development in accordance with the Bank s Article of Association. Article (10) Tasks Delegation Without prejudice to the competence of the General Assembly, the Board will assume all the powers and authorities necessary for its management; and it may delegate committees to exercise some of its powers. The Board can also establish one or more special committees to carry out specific tasks; provided that the formation decision will state the nature of these tasks. The ultimate responsibility for the Bank remains with the Board, even if it establishes committees or delegates some of its power to other people to carry out some of its work. The Board must avoid issuing general or open ended delegation. Article (11) Chairman Duties The Chairman is the Chairman of the Bank s Board of Directors, and he represents it before the third parties and the judiciary. He is primarily responsible for the company s good management in an effective and productive manner, and works to achieve the interests of the company, partners, shareholders and other stakeholders. The Board Charter must contain the tasks and responsibilities of the Chairman, which include the following: Ensure that the Board discussed all the essential issues effectively and in a timely manner. Approve the agenda of its meeting, while taking into consideration any issue raised by any member of the Board. Encourage the Board members to participate collectively and effectively in the conduct of the Board s affairs, to ensure that the Board is carrying out its responsibilities in a manner that achieves the company s interest. Give the Board members access to all the data, information, documents and records related to the company, the Board and its committees. Find effective communication channels with shareholders and work on communicating their views to the Board. Allow and encourage constructive relations between Executive and Mon-Executive Board members. Keep the members constantly informed of the implementation of the provisions of this System. The Chairman may delegate the Audit Committee or others in this matter. The Vice-Chairman takes the Chairman s place in his absence, and the Chairman may authorize other members of the Board in some of his powers. 6

9 Article (12) s Obligations The Board members are committed to the following: 1- Regularly attend the meetings of the Board and its committees. 2- Uphold the interests of the Bank, partners, shareholders and other stakeholders. 3- Express their opinion on the strategic issues of the Bank and its policy. 4- Monitor the Bank s performance to achieve its purposes and objectives. 5- Oversee the development of the governance procedural rules. 6- Manage the Bank in an effective and productive manner. 7- Participate effectively in the Bank s General Assemblies. 8- Not to give any statements, data or information without prior written permission from the Chairman or his representative; knowing that the Director of the Strategy and Business Development Group is the official spokesman for the Bank. 9- Disclose the financial and commercial relations. Article (13) Invitation for Meeting The Board convenes upon the invitation of the Chairman, and pursuant by the bank s Article of Association; the Chairman must call for a Board meeting when it is requested by at least two of its members. The invitation will be directed to each member enclosed with the agenda at least one week before the specified convening date, and it is permissible for any member to add one or more items to the agenda. Article (14) Board Meetings The Board meetings are held regularly and periodically, as provided for in the Bank s Article of Association and the Commercial Companies Law, and upon the invitation of His Excellency the Chairman of the Board of Directors, or in response to the request of two Board members. In 2017, the Board held nine meetings under the chairmanship of His Excellency the Chairman of the Board of Directors; as the Board Chairman attended and chaired all the sessions. The table below shows the number of meetings held by the Board and its committees in that period: Board and the Committees Emanating therefrom Number of Meetings held during 2017 Board of Directors 9 Executive Committee - Audit and Risk Committee 5 Policies and Procedures Committee 1 Benefits and Compensation 1 Committee Zakat Committee 6 Governance Committee 3 Article (15) Board Decisions The Board s decisions are made by a majority vote of the present members and the representatives; and when the votes are tied, the Chairman shall cast the deciding vote. Article (16) Secretary In 1996, the Board of Directors adopted a decision to appoint Mr. Ali Abdullah Gheloom Ahmadi as a Secretary of the Board of Directors (Board Secretary). Article (17) Tasks and Duties of the Secretary The Secretary will assist the Chairman and all the Board members in their tasks, and he is committed to conduct all the Board functions, including: 1- Write the minutes of the Board meetings. 2- Record the Board s decisions in the register prepared for this purpose. 3- Record the meetings held by the Board. 4- Keep the minutes of the Board meetings and its decisions. 5- Send the invitation to the Board members. 6- Achieve full coordination between the Chairman and the Board members. 7- Enable quick access to the Chairman and members to all the Bank s documents and records; along with their information and data. 8- Keep the Board members acknowledgement not to combine the positions that are forbidden to be combined, according to the law and the provisions of this Code. Article (18) Board s Committees The Board of Directors formed six specialized committees in order to assist it in carrying out its duties and they shall report directly to it and carry out the tasks on its behalf to support the effective management practices. These committees are as follows: 1. Executive Committee This Committee consists of five Board members, and the Chief Executive Officer participates in its meetings, in addition to the senior officials in charge of the circulation of information and data under discussion. It is considered as a tool to coordinate the institution s work, and its top tasks and responsibilities include providing the Board with all the new information about the commercial developments and the special transactions; reviewing the performance and work of the various sectors regularly; consulting with / expressing an opinion to the Board regarding the strategic decisions; and preparing credit grant decisions that are within its powers. Furthermore, the Committee works on developing proposals for the Bank s work plans, in preparation for their presentation before the Board of Directors. 7

10 2. Audit and Risk Committee The main objective of this Committee is to assist in promoting the general supervision responsibilities in connection with the Bank s activities, and this includes the provision of financial reports, the Internal Control System, the management of actual risks, and the internal and external audit tasks and the procedures followed for monitoring the extent of the compliance with the laws and regulations governing the Banks work. In particular, the Committee s role also includes reporting to the Board and providing appropriate advice and recommendations on matters relevant to its audit work and the action charter of the Risk Committee in order to facilitate the Board s decision-making. Furthermore, the Committee is also authorized by the Board to investigate any activity within the scope of its competence, and it is entitled to request any information from any employee, and all the employees are directed to cooperate with any requests made by the Committee in this regard. The Committee is also competent to request legal or professional advice from independent third parties and resort to experienced and knowledgeable parties outside the institution, if necessary, but only after consulting with the Board Chairman. The Committee has open powers to contact the Internal and External Auditors and the Bank s Senior Management. The Board established this Committee to review, evaluate and make recommendations to the Board concerning the risks in general, in addition to the accounting, the internal control, the risk environment, the control, the financial reporting, the internal audit, the external audit and the compliance. The regulatory authorities at the Bank (the Internal Audit, the Compliance Sector and the Risk Group) submit detailed periodic reports every three months to the Audit Committee, which will examine, evaluate and submit a detailed report to the Board of Directors to correct the necessary. 3. Policies and Procedures Committee The main objective of this Committee is to study, prepare and develop strategies, objectives, policies, systems and working manuals procedures. The Committee ensures that the Bank s policies and practices will proceed in accordance with the established banking standards; and it reviews the operating efficiency of each one of these tasks, along with ensuring that the functional procedures are consistent with the institution s objectives and operations. The Committee s responsibilities also include monitoring the Bank s quarterly performance in the light of the Strategic Action Plan and the approved budgets. This includes reviewing and strengthening the business development, the harmonization of products, and the distribution of resources to the various sectors at the Bank. The Committee also highlights the aspects and cases of deviation from the policies and procedures set forth in the standards, and submits them to Bank s Management from time to time to take the necessary corrective steps. The Committee is also responsible for formulating the social responsibility policy for the institution in light of what the Bank has submitted from values and slogans. 4. Governance Committee The Governance Committee is an independent committee derived from the Board of Directors. The task of this Committee is the official representation of the communication between the Board of Directors and the Bank s Management in the governance issues and matters; as the Committee, on behalf of the Board, assumes responsibility of the general supervision and due observation for the corporate governance principles, guidelines and practices at the Bank. It also supervises and monitors the application of these principles acrossthe Bank s business and activities, including the review of the general framework of the corporate governance and the compliance with its principles. 5. Nominations, Compensation and Benefits Committee This Committee is responsible for studying and evaluating candidates for the senior executive positions, in addition to the candidates for the membership of the Board of Directors. The Committee is responsible for developing the wage policy to attract, motivate and maintain the staff from the highly qualified employees and those who have the necessary skills to achieve the Bank s objectives throughout the year. Furthermore, the Committee is also responsible for ensuring the balance between the interests of the shareholders, the Bank and its staff. The Committee convenes whenever it is necessary, with the application of a strict policy to not allow any employees to attend when discussing matters regarding their remunerations or contractual arrangements. 6. Zakat Committee The Committee is responsible for strengthening the ties of cooperation and solidarity among the members of the Muslim community through directing the Zakat funds to those who deserve it. The Committee has identified the most prominent legitimate channels to spend these funds in the aspects of humanitarian assistance, public development and other channels in which the Zakat funds can be spent. The Committee is also responsible for developing good relations with charitable associations and organizations, and the humanitarian aid groups that provide assistance in the public development fields for the purpose of assessing the bodies that receive such funds. The Committee is also responsible for developing the Bank s Zakat collection and disbursement policies; along with monitoring the legitimate Zakat provisions balances and the accountability of their disbursement; in addition to calculating the proceeds of the Zakat funds and their distribution according to the legitimate rules and provisions governing it. 8

11 Article (19) Committee s Work The Board issued a decision to nominate the chairman and members of each committee, specifying their competencies and duties and the provisions and procedures of their work. Audit Committee shall meet at least six times during the year. It is prohibited to chair more than one committee established by the Board, and it is not permissible to combine the chair of the Audit Committee and the membership of any other committee. It is permissible to merge the Nominations Committee and the Remuneration Committee into a single committee called The Nominations and Remuneration Committee. The Committee will be valid only in the presence of its Chairman and a majority of its members, and a minutes will be written for every meeting, stating what discussed during the meeting and signed by the Committee s Chairman. Bank s Control System Article (20) Internal Control The Board adopted the Audit Committee s proposal at the Bank s Internal Control System, which includes a control mechanism, the identification of the tasks and competencies of the Bank s departments and sections, and the responsibility s provisions and procedures therein, and the employees outreach and education programs for the importance of self-censorship, the internal control work and the Bank s plan for risk management. Article (21) Internal Control Unit The company s Internal Control System includes the establishment of effective separate units in their work for risk assessment and management; in addition to financial audit and supervision over the company s compliance with the controls related to the financial transactions with any relevant party. Its work is carried out by one or more internal auditors, who have experience and competencies in the financial audit, performance assessment and risk management work. The Auditor is allowed to access all the company s departments and follow-up with their work; and the Board issues the decision to appoint him and define his tasks and remunerations, and he shall be held accountable before the Board. - Internal Audit The Bank has an internal control system to review the work and submit reports and recommendations for correction according to the following: 1- A certified internal control system. 2- Assessment and management of risks and financial audit, in addition to the external audit. 3- The Internal Audit Department has specific role and tasks, as follows: Oversee the application and audit of the Internal Control System. Managed by an operationally competent and independent team and is properly trained. Submit reports directly to the Audit Committee belonging to the Board of Directors. Has access to all the Bank s activities. The Internal Audit Department is an independent department, just like other regulatory departments, and it is only subject to the Audit Committee. The Internal Audit Team consists of a Responsible Manager and a number of specialized employees. The Internal Audit Department prepares and submits periodic reports (every 3 months) concerning the control and supervision procedures of the financial affairs, the investments and the risk management, and the application of the internal control systems. The Bank s Internal Audit function keeps adapting its audit methodology; to ensure its effective response to the expansion of the Bank s business, and the development of its planned and unplanned obligations in the internal audit field in order to recommend the changes to be made to enhance the governance / management s approach, and to manage the risks, the internal controls and the compliance. Thus, the Audit s role has become impossible throughout the year from being an outsourced function to being a body that has full capacity to develop itself in all the internal audit tasks at the Bank. In practice, the Audit team supports directors from various business units through the regular analysis of the audit reports and monitoring the weaknesses. This process is enhanced with the implementation of the self-assessment checklist through the notation system on the assessment points, which would prevent employees from overestimating themselves; along with strengthening this procedure in order to become flawless. This process will reduce the errors that usually occur, and it will be expanded to develop appropriate training tools for the staff in the future. The Internal Audit function provides a valuable contribution enhancing the internal controls, the procedures systems, the quality of services and the provision of advice on how to enrich the training curriculum and the development plans at the Bank in a manner that allows it to focus on the appropriate preventive measures and procedures for the risks faced by the Bank. 9

12 - Compliance Division The working team at the Compliance Sector submits its reports directly to the Audit and Risk Committee, and the Bank s management approach for this team will extensively benefit from the experts views and support the officials in charge of the compliance tasks to ensure the authentication from the full compliance with all the requirements of the local and international legislative and regulatory authorities, including but not limited to, the requirements of Qatar Central Bank and the Basel Committee; the recommendations of the Middle East & North Africa Financial Action Task Force (MENAFATF), the recommendations of the Anti-Money Laundering and Counter Terrorism Financing (AML / CTF) and other international standards related to the governance / the corporate management approach. The Bank s Compliance team played an active role in reviewing policies & procedures, the reference laws and the Board s competencies to ensure the full compliance with the requirements of the Qatar Central Bank and the Qatar Financial Markets Authority (QFMA). On the other hand, the Compliance Group continuously replies to the inquiries of all the Bank departments to obtain clarifications on the rules and standards in place; offering a wide range of advisory services, which include regulator s instructions, laws and regulations on the Bank activities. - Shariah Supervisory Board The Shariah Supervisory Board is primarily responsible for monitoring the compliance of the Bank s work with the provisions of Islamic Shariah Law; in addition to reviewing what is presented to it from operations and products. The Board operates independently with the membership of a group of scientists specializing in the jurisprudence of the commercial and banking transactions. The Board is also responsible for the following: Provide Islamic advice and guidance at the request of the Bank s Management. Review the Auditors reports with the rules of the Islamic Shariah Law and submit a report to the members in this regard. Determine whether the contracts, transactions and deals submitted to the Board are compatible with the Islamic Shariah Law. Review what has been submitted to it from the Bank s marketing materials. Ensure using all the possible means that all the sources of income and revenue realized from sources not compatible with Islamic Shariah law are directed to charitable causes. Shariah Supervision Board Members His Eminence Sheikh Waleed bin Hadi Prof. Dr. Abdul Sattar Abu Ghuddah Dr. Mohamed Ahameen Membership Chairman Member Administrative Member Article (22) Internal Control Reports The reports of the Regulatory Authorities are submitted to the Audit Committee for the Bank s internal control work, and the Board decides based on the recommendation of the Audit Committee the relevant data that should be included in the reports; provided that they at least contain the following: 1- The control and supervision procedures of the financial affairs, the investments and the risk management. 2- The review of the risk factors development at the Bank, and the adequacy and effectiveness of the applicable regulations at the Bank in face of the radical or unexpected changes in the market. 3- Comprehensive assessment of the Bank s performance regarding its compliance with the application of the Internal Control System. 4- The extent of the Bank s compliance with the rules and conditions that govern the disclosure and listing on the market. 5- The extent of the Bank s commitment to the Internal Control Systems at risk identification and management. 6- The risks faced by the Bank; in addition to their types and causes and what has been done in their regard. 7- Proposals for the correction of the violations and the removal of the causes of risks. Article (23) External Control The Bank has a Certified External Auditor who reviews the Bank s business, and submits reports and recommendations for correction. It is not permissible to isolate him during the contract period and he must be changed within a maximum period of five years; and it is not permissible to reappoint him before two years has passed since his last appointment; as the External Auditor submits a report on the results of this review to the Board of Directors and provides the audit opinion on the financial statements to Qatar Islamic Bank (QIB). Moreover, the External Auditor prepares a report on the effectiveness of the internal control over the financial reports; and the External Audit team attends the Audit Committee s meetings and the General Shareholders Assembly meeting. It is worth mentioning that after a maximum period of five 10

13 years from the assignment of the External Audit operation to one of the consultancy firms and audit offices, the Law imposes that the audit firm must be changed to be replaced by another company to do the same task; and the External Auditors will be questioned at the Annual General Assembly meeting concerning their opinions on the annual financial statements, so they have to attend to represent the External Audit during this meeting. The External Auditors provide services to the Bank either on the scope of external audit or others after obtaining the approval of the Audit and Risk Committee, which approves the access to certain types of services, whether related to the scope of the external audit directly or indirectly, or services unrelated to the scope of the external audit, and that is on an annual basis. The External Auditor is also committed to provide the services approved by the Audit and Risk Committee or those that are recommended by the Bank s Senior Management; in preparation for approving their obtainment by the Committee. Moreover, the Audit Committee determines and develops the ceiling of the annual maximum limit that can be spent in exchange for the approved and certified services throughout the year; and it also controls the amounts disbursed in exchange for obtaining the various services provided by the External Auditor in exchange for the ceilings that have been adopted to obtain these services. Article (24) Auditor s Tasks and Responsibilities The Auditor must inform the Board, in writing, about any risks faced or are expected to be faced by the Bank and all the discovered violations immediately upon his knowledge about them, and he must send a copy of that communication to the (QFMA). He is entitled to call the General Assembly to convene in accordance with the provisions of the Law in this regard; provided that he will inform the (QFMA) about it. Furthermore, the Auditor, even if there is more than a single auditor, will submit a single report to the General Assembly and read it, and he will send a copy thereof to the (QFMA). He will be responsible for the data contained therein, and each member of the General Assembly is entitled to discuss any matter in the report with the Auditor and seek clarification to what has been stated therein, which includes all that is associated with the financial control and performance assessment work. Article (25) Disclosure The Bank is committed to the disclosure requirements, including the financial reports, and the number of shares owned by each of the Chairman and the members of the Board, the Senior Executive Management, and the major shareholders or controlling shareholders; in addition to disclosing information about the Chairman and members of the Board and its committees, and their scientific and practical experiences from their resumes. The Bank has defined a policy for dealing with rumors by checking them from the Executive and Marketing Management and the Board of Directors to determine how to deal with them according to the interests of the Bank and the shareholders rights protection. The Bank will disclose to the Qatar Stock Exchange and the Qatar Financial Markets Authority (QFMA), in addition to the Qatar Central Bank (QCD) the issues and developments that may affect the performance of the Bank s share price listed on the Stock Exchange; and the Bank adopts the two principles of transparency and full disclosure as a cornerstone when communicating with either the regulatory bodies or any other stakeholders. Article (26) Conflicts of Interest Without prejudice to the provisions of the Law in this regard, the Board is committed to the principles of this System, and to disclose the dealings and transactions concluded by the Bank with any Relevant Party, where the latter has an interest therein that may conflict with the Bank s interests. The Board must put a detailed breakdown at the disposal of shareholders for the dealings and transactions referred to in the preceding paragraph at least a week before the specified convening date of the General Assembly, which has been called for to look into the Bank s budget and the Board s report. The Board must disclose it in the Bank s annual report. In all cases, it is not permissible for the Bank to conclude any big deals with any Relevant Parties unless after obtaining the approval of the Bank s General Assembly; and it must include the agenda of the next General Assembly to complete its conclusion procedures. Article (27) Transparency and Upholding the Bank s Interests Any Relevant Party, who is a party or linked to an operation, relationship or transaction concluded with the Bank, is not permitted to attend the Board s meeting during its discussion of this operation, relationship or transaction, and he is not entitled to vote on the decisions issued by the Board in this regard. Article (28) Disclosure of Trading Operations The Board members, the Senior Executive Management and all the informed individuals, their spouses and their minor children must disclose their trading operations, which they carry out using the Bank s shares and all its other securities. The Board has adopted clear rules and procedures include the trading of the informed individuals with the securities issued by the Bank. Stakeholders Rights 11

14 Article (29) Equality between the Shareholders Rights Shareholders are equal and have all the rights arising from the ownership of the shares, in accordance with the provisions of the law and the relevant regulations and decisions. Article (30) Review of the Shareholders Register The Bank submits a monthly request to the Depositary to obtain an updated version of the Shareholders Register and to keep a copy thereof. Article (31) Shareholder s Right to Access Information The Bank s Article of Association and its internal regulations must include the procedures for the shareholder s access to the information that enables him to exercise his full rights, without prejudice to the rights of other shareholders or causing harm to the Bank s interests. Article (32) Shareholders Rights regarding the General Assembly The Bank s Statute includes the organization of the shareholders rights related to the General Assembly s meeting, which include: 1- The right of the shareholder(s), who own at least (10%) of the Bank s capital, for serious reasons to request a General Assembly s meeting to be convened, and the right of the shareholders representing at least (25%) of the Bank s capital to request to an Extraordinary General Assembly s meeting to be convened. 2- The right to request the inclusion of certain issues in the General Assembly s agenda. 3- The right to attend the General Assembly meeting. 4- The right of the shareholder to delegate another shareholder from the non-board members, under a power of attorney, to attend the General Assembly meeting; provided that the number of shares held by the proxy in this capacity does not (5%) of the Bank s share capital. 5- The right of the minor and interdicted shareholders to attend the General Assembly meeting, and they are legally represented by their delegates. 6- The right of the shareholder to direct questions to the Board members and their commitment to answer them. 7- The right to vote on the General Assembly s decisions. 8- The right of the shareholder to object to any decision. Article (33) Facilitation for the Effective Participation Methods in the General Assembly The best locations and dates are chosen for convening the General Assembly; and the Bank uses the modern technology to communicate with shareholders in order to facilitate the effective participation of the largest number of its shareholders in the General Assembly meeting. The Bank enables the shareholders to learn about the topics listed on the agenda and their update, enclosed with the sufficient information to enable them to make their decisions; in addition to enabling them to view the minutes of the General Assembly meeting. The Bank must also disclose the results of the General Assembly meeting upon its completion, and file a copy of the meeting s minutes to the (QFMA) immediately upon its approval. Article (34) Shareholders Rights regarding Voting Voting is the shareholder s right that he exercises in person or through his legal representative, and it cannot be waived and revoked. Article (35) Shareholders Rights regarding the Election of Board Members The General Assembly elects the Board members by a secret ballot and in accordance with the cumulative voting method. Article (36) Shareholders Rights regarding Profit Distribution The Bank s Article of Association determines the minimum net profit that must be distributed to shareholders, without prejudice to its ability to meet its obligations towards others; and the Board must develop a clear policy to distribute these profits to achieve the interests of the Bank and the shareholders. Furthermore, the shareholders must be informed about this policy at the General Assembly meeting, and it must be indicated in the Board s report. The profits, which the Assembly approved to distribute whether in cash or as free shares to the shareholders registered at the Shareholders Register at the Depositary, will be entitled at the end of the General Assembly convening day. Article (37) Shareholders Rights regarding Major Deals The Bank s Statute must include a specific mechanism for protecting the shareholders rights in general and the minority in particular, in case the Bank concludes major deals that may harm their interests or prejudice the ownership of the Bank s capital. 12